The JNK junk bond ETF just made a new high for the year yesterday. This is telling us that there is no instant stock market collapse coming right now. Take a look at the chart.
Last night UK had the election results with a massive Boris Johnson win.
That news item is now out of the way.
And this weekend we will finally have a resolution to the China/Trump trade situation one way or the other. I know the news this morning is all about an “agreement in principle.” But I’m not going to get excited until a real deal is actually signed as we heard that type of talk last October and nothing happened. What is important is that whatever happens this weekend nothing else is likely to happen till after the 2020 election.
So as this issue goes away after this weekend people no longer will be trading around tweets and rumors over trade.
What will people make their trades about then?
The answer is simple – pure price momentum going into the end of the year.
And that is why some people bought JNK yesterday. And there is no doubt that the Fed’s new QE operation they won’t call QE is helping. Take a look at this screen shot of the Fed’s balance sheet starting to balloon again.
BTW – this week also saw gold mining giant NEM hit a new high for the year.
It’s fun and it’s Friday.
I hope something good happens to you today!